Porn surfing by SEC execs draws GOP ire

Republicans are stepping up their criticism of the Securities and Exchange Commission following reports that senior agency staffers spent hours surfing pornographic websites on government-issued computers while they were supposed to be policing the nation’s financial system.

California Rep. Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, said it was “disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking action to help stave off the events that put our nation’s economy on the brink of collapse.”

He said in a statement Thursday that SEC officials “were preoccupied with other distractions” when they should have been overseeing the growing problems in the financial system.

The SEC’s inspector general conducted 33 probes of employees looking at explicit images in the past five years, according to a memo obtained by The Associated Press.

The memo says 31 of those probes occurred in the 2 1/2 years since the financial system teetered and nearly crashed.

The staffers’ behavior violated government-wide ethics rules, it says.

The memo provides fresh ammunition for Republicans who suspect the timing of the SEC’s lawsuit last week against Wall Street powerhouse Goldman Sachs Group Inc. News of the suit came as the Senate prepared to take up a sweeping overhaul of the rules governing banks and other financial companies.

The memo was written by SEC Inspector General David Kotz in response to a request from Sen. Charles Grassley, R-Iowa. It summarizes past inspector general probes and reports some shocking findings:

• A senior attorney at the SEC’s Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of hard drive space, he burned the files to CDs or DVDs, which he kept in boxes around his office. He agreed to resign, an earlier watchdog report said.

• An accountant was blocked more than 16,000 times in a month from visiting websites classified as “Sex” or “Pornography.” Yet he still managed to amass a collection of “very graphic” material on his hard drive by using Google images to bypass the SEC’s internal filter, according to an earlier report from the inspector general. The accountant refused to testify in his defense, and received a 14-day suspension.

• Seventeen of the employees were “at a senior level,” earning salaries of up to $222,418.

• The number of cases jumped from two in 2007 to 16 in 2008. The cracks in the financial system emerged in mid-2007 and spread into full-blown panic by the fall of 2008.

An SEC spokesman declined to comment Thursday night.

About 16 percent of men with Internet access at work admit to looking at online porn while at the office, according to a 2006 survey by Websense Inc.

Former SEC spokesman Michael Robinson said he shares the public’s outrage about SEC staffers who enjoyed porn on the taxpayer dime when they were supposed to be keeping the markets safe.

“That kind of behavior is just intolerable and atrocious,” said Robinson, now with Levick Strategic Communications. He said he expects the head of the SEC, Mary Schapiro and her team, are “very focused on” the issue.

Schapiro has been parrying GOP complaints about the Goldman Sachs lawsuit, which agency officials hoped would mark a new era of tougher oversight of Wall Street. They followed high-profile embarrassments including the failure to catch Ponzi kings Bernard Madoff and R. Allen Stanford.

Republican lawmakers also accused the SEC of being influenced by politics. The SEC’s commissioners approved the Goldman charges on a rare 3-2 vote. The two who objected were Republicans.

Schapiro is a registered independent who has been appointed by presidents of both parties.


Associated Press writer Christine Simmons contributed to this report.

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  1. Nevad Ned

    The SEC paid executives up to $222 K to look a online porn? What a waste! They should have paid 10 people $22K each to look at porn. It would be more productive, and would stimulate the economy. And stimulate the employees!

  2. Norris Hall

    So now we know what the regulators were doing on President Bush’s watch.
    Watching Porn.
    Instead of regulating, they were surfing.
    One wonders how many other Bush Adminsitration regulatory agencies were also spending time porn surfing than working.

  3. woody188

    Kind of weird the tit for tat between the SEC and Goldman. Goldman Sachs is about to get kicked in the teeth since they are also being barred from England and Germany. They probably deserve it.

    • Carl Nemo

      “They probably deserve it.” …extract from post

      I’d say your ‘kind’ remark is generous understatement. Little do people realize that Goldman Sachs has virtually pulled off a soft coup d’etat of the United States Government with the complicity of their running dog crimpols in high places spanning three administrations from Clinton to present.

      Maybe there is justice and sometimes it jumps out from behind the curtaiin. It is my hope that Goldman Sach & Co. is totally crushed; ie, destroyed and end up the same as they engineered against Lehman Bros. and Bear Stearns, their financial ghosts seeking just vengeance from beyond the grave… : )

      Carl Nemo **==

  4. paulb6

    Typical govt worker action, no work, high salarys,obese retirement and fire proof. Great job all you lousy sobs

  5. Guardhouse lawyer

    Could it be that the Repubs are upset about this surfing by others because it’s causing bandwidth problems on the sites they want to look at?